Exhibit 99.2
 
Contact:
  
FOR RELEASE:
Richard E. Moran Jr.
  
April 29, 2002
Executive Vice President
and Chief Financial Officer
(310) 563-5533
or
Tyler H. Rose
Senior Vice President
and Treasurer
(310) 563-5531
 
KILROY REALTY CORPORATION REPORTS
FIRST QUARTER FINANCIAL RESULTS
 
LOS ANGELES, April 29, 2002—Kilroy Realty Corporation (NYSE: KRC) today reported financial results for its first quarter ended March 31, 2002, with net income of $13.5 million, or $0.49 per share, on revenues of $52.6 million. Included in the company’s first-quarter earnings is $3.9 million, or $0.13 per share, of non-recurring preferred return income. In the first quarter of 2001, KRC reported net income of $6.4 million, or $0.24 per share, on revenues of $50.4 million.
 
Funds from operations (FFO) totaled $27.2 million, or $0.89 per share, compared to $21.9 million, or $0.72 per share in the prior year’s first quarter.
 
All per-share amounts in this report are presented on a diluted basis.
 
As previously reported, the company completed in the first quarter the buyout of the remaining real estate interests in twelve properties from The Allen Group. In connection with that transaction, KRC recognized $0.13 per share of preferred return income on its equity investment that had been earned previously but had been fully reserved for financial reporting purposes until the buyout was completed and the related litigation between the parties was settled.

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KRC completed and stabilized $32 million of new development in the first quarter of 2002, adding an aggregate 131,300 square feet of space in two new office properties to its portfolio. At quarter’s end, the company’s stabilized portfolio was 94.2% occupied.
 
KRC has an additional 910,000 square feet of space currently in lease-up, under construction or committed for construction representing a total estimated investment of approximately $263 million. These properties are 62% leased or committed.
 
Some of the information presented in this release is forward-looking in nature within the meaning of the Private Securities Litigation Reform Act of 1995. Although Kilroy Realty Corporation believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, there can be no assurance that its expectations will be achieved. Certain factors that could cause actual results to differ materially from Kilroy Realty’s expectations are set forth as risk factors in the company’s Securities and Exchange Commission reports and filings. Included among these factors are changes in general economic conditions, including changes in the economic conditions affecting industries in which its principal tenants compete; any failure of the general economy to recover timely from the current economic downturn; Kilroy Realty’s ability to timely lease or re-lease space at current or anticipated rents; changes in interest rates; changes in operating costs, including utility costs; future demand for its debt and equity securities; its ability to refinance its debt on reasonable terms at maturity; its ability to complete current and future development projects on schedule and on budget; the demand for office space in markets in which Kilroy Realty has a presence; and risks detailed from time to time in the company’s SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-K. Many of these factors are beyond Kilroy Realty’s ability to control or predict. Forward-looking statements are not guarantees of performance. For forward-looking statements herein, Kilroy Realty claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
 
Kilroy Realty Corporation is a Southern California-based real estate investment trust active in the office and industrial property sectors. For more than 50 years, the company

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has owned, developed, acquired and managed real estate assets primarily in the coastal regions of California and Washington. Principal submarkets for KRC’s current development program include West Los Angeles, El Segundo and coastal San Diego, where the company’s total development pipeline is more than $500 million. At March 31, 2002, the company owned 7.4 million square feet of commercial office space and 5.1 million square feet of industrial space.
 
 
#########################

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KILROY REALTY CORPORATION
SUMMARY QUARTERLY RESULTS
 
(unaudited, in thousands, except per share data)
 
      
Three Months Ended
March 31, 2002
       
Three Months Ended
March 31, 2001
  
Revenues
     
$
52,635
 
     
$
50,367
 
Net Income available to common stockholders (1)
     
$
13,507
 
     
$
6,426
 
Weighted average common shares outstanding—basic
     
 
27,256
 
     
 
26,713
 
Weighted average common shares outstanding—diluted
     
 
27,550
 
     
 
26,971
 
Net Income per share of common stock—basic
     
$
0.50
 
     
$
0.24
 
Net Income per share of common stock—diluted
     
$
0.49
 
     
$
0.24
 
Operating Earnings (2)
     
$
15,017
 
     
$
8,358
 
Weighted average common shares/units outstanding—basic (3)
     
 
30,317
 
     
 
30,225
 
Weighted average common shares/units outstanding—diluted (3)
     
 
30,611
 
     
 
30,484
 
Operating Earnings per common share/unit—basic (3)
     
$
0.50
 
     
$
0.28
 
Operating Earnings per common share/unit—diluted (3)
     
$
0.49
 
     
$
0.27
 
Funds From Operations
     
$
27,153
 
     
$
21,876
 
Funds From Operations per common share/unit—basic (3)
     
$
0.90
 
     
$
0.72
 
Funds From Operations per common share/unit—diluted (3)
     
$
0.89
 
     
$
0.72
 
Common shares outstanding at end of period
     
 
27,572
 
     
 
26,975
 
Common partnership units outstanding at end of period
     
 
4,458
 
     
 
3,282
 
      
    
Total common shares and units outstanding at end of period
     
 
32,030
 
     
 
30,257
 
      
March 31, 2002
       
March 31, 2001
  
Occupancy rates:
                      
California
     
 
93.9
%
     
 
96.4
%
Washington
     
 
98.3
%
     
 
100.0
%
Arizona
     
 
100.0
%
     
 
100.0
%
Nevada
                
 
100.0
%
      
    
Weighted average total
     
 
94.2
%
     
 
96.6
%
Total square feet of stabilized properties owned at end of period:
                      
Office
     
 
7,357
 
     
 
7,064
 
Industrial
     
 
5,086
 
     
 
5,768
 
      
    
Total
     
 
12,443
 
     
 
12,832
 
 
(1)
 
Net Income after minority interests.
(2)
 
Excludes effect of 2001 charge for cumulative effect of change in accounting principle of $1.4 million.
(3)
 
Calculated based on weighted average shares outstanding assuming conversion of all common limited partnership units outstanding.

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KILROY REALTY CORPORATION CONSOLIDATED BALANCE SHEETS
 
(unaudited, in thousands)
 
    
March 31,
2002
     
December 31,
2001
  
ASSETS
                  
INVESTMENT IN REAL ESTATE:
                  
Land and improvements
   
$
277,842
 
   
$
269,366
 
Buildings and improvements
   
 
1,179,214
 
   
 
1,140,499
 
Undeveloped land and construction in progress
   
 
204,566
 
   
 
191,129
 
    
  
Total investment in real estate
   
 
1,661,622
 
   
 
1,600,994
 
Accumulated depreciation and amortization
   
 
(248,702
)
   
 
(241,665
)
    
  
Investment in real estate, net
   
 
1,412,920
 
   
 
1,359,329
 
Cash and cash equivalents
   
 
10,432
 
   
 
16,487
 
Restricted cash
   
 
5,984
 
   
 
5,413
 
Tenant receivables, net
   
 
30,051
 
   
 
32,151
 
Deferred financing and leasing costs, net
   
 
42,208
 
   
 
37,068
 
Prepaid expenses and other assets
   
 
4,896
 
   
 
6,781
 
    
  
TOTAL ASSETS
   
$
1,506,491
 
   
$
1,457,229
 
    
  
LIABILITIES & STOCKHOLDERS’ EQUITY
                  
LIABILITIES:
                  
Secured debt
   
$
457,186
 
   
$
459,587
 
Unsecured line of credit
   
 
284,000
 
   
 
155,000
 
Unsecured term facility
            
 
100,000
 
Accounts payable, accrued expenses and other liabilities
   
 
49,745
 
   
 
53,879
 
Accrued distributions
   
 
15,163
 
   
 
14,634
 
Rents received in advance and tenant security deposits
   
 
15,155
 
   
 
15,955
 
    
  
Total liabilities
   
 
821,249
 
   
 
799,055
 
    
  
MINORITY INTERESTS:
                  
8.075% Series A Cumulative Redeemable
                  
Preferred unitholders
   
 
73,716
 
   
 
73,716
 
9.375% Series C Cumulative Redeemable
                  
Preferred unitholders
   
 
34,464
 
   
 
34,464
 
9.250% Series D Cumulative Redeemable
                  
Preferred unitholders
   
 
44,321
 
   
 
44,321
 
Common unitholders of the Operating Partnership
   
 
74,477
 
   
 
49,176
 
Minority interest in Development LLCs
            
 
15,869
 
    
  
Total minority interests
   
 
226,978
 
   
 
217,546
 
    
  
STOCKHOLDERS’ EQUITY:
                  
Common stock
   
 
275
 
   
 
274
 
Additional paid-in capital
   
 
494,354
 
   
 
479,295
 
Distributions in excess of earnings
   
 
(33,305
)
   
 
(33,163
)
Accumulated net other comprehensive loss
   
 
(3,060
)
   
 
(5,778
)
    
  
Total stockholders’ equity
   
 
458,264
 
   
 
440,628
 
    
  
TOTAL LIABILITIES & STOCKHOLDERS’ EQUITY
   
$
1,506,491
 
   
$
1,457,229
 
    
  

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KILROY REALTY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS
 
(unaudited, in thousands, except per share data)
 
      
Three Months
Ended
March 31, 2002
       
Three Months
Ended
March 31, 2001
  
REVENUES:
                      
Rental income
     
$
45,295
 
     
$
44,379
 
Tenant reimbursements
     
 
5,618
 
     
 
5,520
 
Interest income
     
 
285
 
     
 
436
 
Other income
     
 
1,437
 
     
 
32
 
      
    
Total revenues
     
 
52,635
 
     
 
50,367
 
      
    
EXPENSES:
                      
Property expenses
     
 
7,701
 
     
 
6,982
 
Real estate taxes
     
 
3,850
 
     
 
3,635
 
General and administrative expenses
     
 
2,968
 
     
 
3,089
 
Ground leases
     
 
383
 
     
 
392
 
Interest expense
     
 
9,359
 
     
 
10,791
 
Depreciation and amortization
     
 
12,866
 
     
 
13,611
 
      
    
Total expenses
     
 
37,127
 
     
 
38,500
 
      
    
Income from operations
     
 
15,508
 
     
 
11,867
 
Net gains on dispositions of operating properties
                
 
305
 
      
    
Income before minority interests and cumulative effect of change in
accounting principle
     
 
15,508
 
     
 
12,172
 
      
    
Minority interests:
                      
Distributions on Cumulative Redeemable Preferred units
     
 
(3,375
)
     
 
(3,375
)
Minority interest in earnings of Operating Partnership
     
 
(1,510
)
     
 
(845
)
Recognition of previously reserved Development LLC preferred return
     
 
3,908
 
           
Minority interest in earnings of Development LLCs
     
 
(1,024
)
     
 
(134
)
      
    
Total minority interests
     
 
(2,001
)
     
 
(4,354
)
      
    
Net income before cumulative effect of change in accounting principle
     
 
13,507
 
     
 
7,818
 
Cumulative effect of change in accounting principle
                
 
(1,392
)
      
    
Net income
     
$
13,507
 
     
$
6,426
 
      
    
Weighted average shares outstanding—basic
     
 
27,256
 
     
 
26,713
 
Weighted average shares outstanding—diluted
     
 
27,550
 
     
 
26,971
 
Net Income per common share—basic
     
$
0.50
 
     
$
0.24
 
      
    
Net Income per common share—diluted
     
$
0.49
 
     
$
0.24
 
      
    

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KILROY REALTY CORPORATION
OPERATING EARNINGS
 
(unaudited, in thousands, except per share data)
 
      
Three Months Ended
March 31, 2002
     
Three Months Ended
March 31, 2001
  
Net income
     
$
13,507
     
$
6,426
 
  Adjustments:
                    
    Minority interest in earnings of Operating Partnership
     
 
1,510
     
 
845
 
    Net gains on dispositions of operating properties
              
 
(305
)
    Cumulative effect of change in accounting principle
              
 
1,392
 
      
    
Operating Earnings
     
$
15,017
     
$
8,358
 
      
    
Weighted average common shares/units outstanding—basic
     
 
30,317
     
 
30,225
 
Weighted average common shares/units outstanding—diluted
     
 
30,611
     
 
30,484
 
Operating Earnings per common share/unit—basic
     
$
0.50
     
$
0.28
 
      
    
Operating Earnings per common share/unit—diluted
     
$
0.49
     
$
0.27
 
      
    
 
KILROY REALTY CORPORATION
FUNDS FROM OPERATIONS
 
(unaudited, in thousands, except per share data)
 
      
Three Months Ended
March 31, 2002
     
Three Months Ended
March 31, 2001
Operating Earnings
     
$
15,017
     
$
8,358
  Adjustments:
                  
    Depreciation and amortization
     
 
12,136
     
 
12,970
    Non-cash amortization of restricted stock grants
              
 
548
      
    
Funds From Operations
     
$
27,153
     
$
21,876
      
    
Funds From Operations per common share/unit—basic
     
$
0.90
     
$
0.72
      
    
Funds From Operations per common share/unit—diluted
     
$
0.89
     
$
0.72
      
    
 
KILROY REALTY CORPORATION
FUNDS AVAILABLE FOR DISTRIBUTION
 
(unaudited, in thousands, except per share data)
 
      
Three Months Ended
March 31, 2002
       
Three Months Ended
March 31, 2001
  
Funds From Operations
     
$
27,153
 
     
$
21,876
 
  Adjustments:
                      
    Amortization of deferred financing costs
     
 
778
 
     
 
381
 
    Tenant improvements, leasing commissions and recurring capital expenditures
     
 
(335
)
     
 
(1,011
)
    Net effect of straight-line rents
     
 
(1,228
)
     
 
(1,714
)
      
    
Funds Available for Distribution
     
$
26,368
 
     
$
19,532
 
      
    
Funds Available for Distribution per common share/unit—basic
     
$
0.87
 
     
$
0.65
 
      
    
Funds Available for Distribution per common share/unit—diluted
     
$
0.86
 
     
$
0.64
 
      
    
 

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